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Marshall’s NEG deal to strengthen Victoria’s baseload

Marshall’s NEG deal to strengthen Victoria’s baseload

A “quid pro quo” deal may be sought by Steven Marshall for federal funding towards a $700 million electricity transmission link with NSW in return
for South Australia signing up to the federal national energy guarantee.

The new Liberal Premier has allocated $200m to fast-track an interconnector with NSW, likely to cost up to $700m, to supplement South Australia’s sole
Victorian link to the national electricity grid.

An interconnector with NSW would allow South Australia to ­import additional baseload power while exporting surplus renewable generation.

Mr Marshall said the new interconnector would be operational by 2021-22, ahead of the next state election, but a funding model had yet to be finalised.

Malcolm Turnbull, Scott Morrison and Josh Frydenberg said the election of a Marshall government meant an NEG was now likely to be approved, with the
ACT the only jurisdiction still holding out.

Mr Marshall, asked yesterday whether federal funding support for a new interconnector could be a quid pro quo for South Australia signing on and legislating
for an NEG, did not rule it out.

“All of those conversations are down the track,” he said, with the federal government’s NEG back on the table at a Council of Australian Governments
ministerial meeting next month. “I want to work in a co-operative way with the Commonwealth - we’ll make sure we get the best deal.”

Mr Marshall said an interconnector with NSW was “absolutely not” fanciful. “This is something we want to proceed with as soon as possible,” he said.
“It could be an arrangement with a regulated interconnector, it could be a private interconnector. But what we need is greater interconnectivity.”

The Premier said the capacity of the Victorian link was “already under enormous strain”.

NSW Energy Minister Don Harwin said he looked forward to formal talks with the South Australian government, having been briefed on the plan before
Saturday’s election.

“We welcome Premier Marshall’s plan ... NSW has a resilient system, with a good mix of generation and interconnectors, and supports improved transmission
so long as it is cost-effective,” Mr Harwin said.

Mr Frydenberg, the federal ­Energy Minister, said a regulatory investment test, already under way, would help determine a funding mechanism for a new
interconnector. “It (the cost) would depend on how far the interconnector went into NSW,” he said.